Frugal innovation: The secret weapon for Indian CIOs driving digital transformation

Indian enterprises today face a complex mandate, CIOs must simultaneously drive innovation, digitize operations, and fuel growth, all while optimizing limited IT budgets. This challenge has ushered in a new mindset. Instead of grand transformation programs, CIOs are focusing on smaller, faster, and resource-consciousness. 

This shift has given rise to a new archetype, the “frugal innovator” CIO leaders who harness creativity and discipline to maximize value from constrained resources. 

Reuse Over Replacement 

Instead of sweeping rip-and-replace initiatives, CIOs in India are adopting a philosophy of “reuse over replacement.” Legacy infrastructures are being retrofitted to work alongside cloud-native applications. Expensive proprietary tools are being swapped for open-source alternatives and internally built solutions. 

Radheshyam Dhakad, CTO of RackBank & NeevCloud, highlights this approach. He said, "We drive innovation and reduce costs by building our technology solutions instead of relying on expensive commercial platforms. Our architecture, built around efficient bare-metal servers and modular systems, lets us scale smoothly and avoid unnecessary overhead." 

Similarly, Ajay Sawant, Chairman & Managing Director of Orient Technologies, describes a disciplined pilot strategy, "We launch small, measurable pilots with clear success criteria linked to business value. If a pilot shows impact and cross-functional buy-in, it scales. If not, we fail fast, document learnings, and shift resources swiftly." 

The emphasis is on smart experimentation that conserves capital and sharpens focus. This mindset aligns with Gartner’s 2025 CIO Agenda report, which notes that while 79% of CIOs expect business model change, only 31% feel ready to support it, making frugal, iterative innovation a necessity. 

Faster, Smaller, Smarter

Speed and agility are paramount. CIOs adopt “fail fast” models to validate ideas quickly and cheaply, borrowing playbooks from startups: cross-functional teams, shadow IT integration, and rapid prototyping. 

Yogesh Pant, Managing Director and VP Engineering at GoTo India, shares a practical example, "Instead of costly infrastructure overhauls, we enhance existing systems with AI-powered integrations. For instance, our AI-powered screen translation in LogMeIn Rescue enables instant, real-time assistance across languages without additional software changes." 

Open-source adoption plays a vital role in accelerating flexibility. Ajay Sawant underscores this. He said, "Open-source accelerates faster innovation cycles by providing adaptable building blocks rather than expensive monolithic solutions." 

Manish Jha, CTO of Addverb Technologies, highlights innovation within existing infrastructure with a tech-forward approach, "Our strategy over the past 12 to 18 months focused on integrating AI, ML, and IoT with our hardware and software, enabling smarter decision making and predictive maintenance. This reduces unplanned downtime and improves productivity without inflating IT budgets.” 

Internal marketplaces of APIs, reusable components, and tech stacks further empower teams to innovate without reinventing the wheel, reducing vendor dependency and increasing long-term flexibility. 

Sector-Specific Adaptations 

Across sectors such as healthcare, logistics, and manufacturing, frugal innovation delivers tangible results. Hospitals deploy telemedicine systems by integrating existing video platforms and EHR add-ons. Logistics firms customize open-source warehouse management systems, while manufacturing SMEs combine modular SaaS tools for CRM and ERP functions, avoiding costly vendor lock-ins. 

Collaboration Gains, Vendor Trade-Offs 

This lean approach fosters closer IT-business collaboration. Lower experimentation barriers encourage early business user engagement. Quick feedback loops and limited financial exposure reduce resistance and speed decision-making. 

Lakshminarasimman Raghavan, GVP- Technology, Publicis Sapient highlights cross-functional collaboration. He said, "Organizations can innovate through teams like Product-Oriented Delivery (PODs) consisting of cross-functional teams that help drive effective solutions. Non-IT teams can bring in business and functional knowledge and participate effectively in creating innovative solutions to solve real-world problems, thereby increasing the relevance and applicability of such solutions." 

However, frugal innovation is not without trade-offs. Limited pilots sometimes lack scalability planning; in-house builds strain IT resources; and reliance on open-source tools can create support bottlenecks. Yet, these challenges are manageable compared to expensive, slow, and often ineffective large-scale programs. 

A New Default 

Despite economic uncertainty, Gartner report also predicts 69% of CIOs will increase digital technology investments, a cautiously optimistic outlook mirrored in India. 

By embracing frugal innovation, CIOs balance fiscal discipline with innovation velocity, regaining control over digital transformation pace and scope.